UNITED STATESd18rn0p25nwr6d.cloudfront.net/CIK-0000064978/698fd... · 1-6571 (Commission File...

UNITED STATESSECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORTPursuant to Section 13 OR 15(d) ofthe Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) February 5, 2020

Merck & Co., Inc.

(Exact name of registrant as specified in its charter)

New Jersey(State or other jurisdiction

of incorporation)

1-6571(CommissionFile Number)

22-1918501(IRS Employer

Identification No.)

2000 Galloping Hill Road, Kenilworth, NJ(Address of principal executive offices)

07033(Zip Code)

Registrant’s telephone number, including area code (908) 740-4000

Not Applicable

(Former name or former address, if changed since last report.) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the followingprovisions: ¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) orRule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ¨ If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new orrevised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨ Securities registered pursuant to Section 12(b) of the Act:

Title of each class Trading Symbol(s) Name of each exchange on which registered

Common Stock ($0.50 par value) MRK New York Stock Exchange1.125% Notes due 2021 MRK/21 New York Stock Exchange0.500% Notes due 2024 MRK 24 New York Stock Exchange1.875% Notes due 2026 MRK/26 New York Stock Exchange2.500% Notes due 2034 MRK/34 New York Stock Exchange1.375% Notes due 2036 MRK 36A New York Stock Exchange

Item 2.02. Results of Operations and Financial Condition. The following information, including the exhibits hereto, is being furnished pursuant to this Item 2.02. Incorporated by reference is a press release issued by Merck & Co., Inc. (the “Company”) on February 5, 2020, regarding earnings for the fourth quarter and yearend of 2019, attached as Exhibit 99.1. Also incorporated by reference is certain supplemental information not included in the press release, attached as Exhibit99.2. This information shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), orotherwise subject to the liabilities of that Section, and is not incorporated by reference in any filing under the Securities Act of 1933, as amended, or the ExchangeAct, except as expressly set forth by specific reference in such filing. Item 8.01. Other Events. Incorporated by reference is a press release issued by the Company on February 5, 2020, regarding the spin-off of certain products into a new, independent,publicly-traded company. Item 9.01. Financial Statements and Exhibits.

(d) Exhibits Exhibit 99.1 Press release issued February 5, 2020, regarding earnings for the fourth quarter and year end of 2019 Exhibit 99.2 Certain supplemental information not included in the press release Exhibit 99.3 Press release issued February 5, 2020, regarding the spin-off of certain products into a new, independent, publicly-traded company Exhibit 104 Cover Page Interactive Data File (embedded within the Inline XBRL document)

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the

undersigned hereunto duly authorized. Merck & Co., Inc. Date: February 5, 2020 By: /s/ Faye C. Brown FAYE C. BROWN Senior Assistant Secretary

Exhibit 99.1

News Release FOR IMMEDIATE RELEASE Media Contacts: Jennifer Mauer Investor Contacts: Peter Dannenbaum (908) 740-1801 (908) 740-1037 Pamela Eisele Michael DeCarbo (267) 305-3558 (908) 740-1807

Merck Announces Fourth-Quarter and Full-Year 2019 Financial Results

· Fourth-Quarter 2019 Worldwide Sales Were $11.9 Billion, an Increase of 8%; Excluding the Impact from Foreign Exchange, Sales Grew 9% · Fourth-Quarter 2019 GAAP EPS Was $0.92; Fourth-Quarter Non-GAAP EPS Was $1.16 · Full-Year 2019 Worldwide Sales Were $46.8 Billion, an Increase of 11%; Excluding the Impact from Foreign Exchange, Sales Grew 13%

o KEYTRUDA 2019 Worldwide Sales Grew 55% to $11.1 Billion; Excluding the Impact from Foreign Exchange, Sales Grew 58%

o Human Health Vaccines 2019 Worldwide Sales Grew 15% to $8.4 Billion; Excluding the Impact from Foreign Exchange, Sales Grew 17%

o BRIDION 2019 Worldwide Sales Grew 23% to $1.1 Billion; Excluding the Impact from Foreign Exchange, Sales Grew 26%

o Animal Health 2019 Worldwide Sales Grew 4% to $4.4 Billion; Excluding the Impact from Foreign Exchange, Sales Grew 9% · Full-Year 2019 GAAP EPS Was $3.81; Full-Year Non-GAAP EPS Was $5.19 · 2020 Financial Outlook

o Anticipates Full-Year 2020 Worldwide Sales to Be Between $48.8 Billion and $50.3 Billion, Including a Negative Impact from Foreign Exchange of LessThan 1%

o Expects Full-Year 2020 GAAP EPS to Be Between $4.57 and $4.72; Expects Non-GAAP EPS to Be Between $5.62 and $5.77, Including a Negative

Impact from Foreign Exchange of Approximately 1.5% · In Conjunction with Fourth-Quarter Results, Merck Announces its Intention to Focus on Key Growth Pillars Through Spinoff of Women’s Health, Trusted

Legacy Brands and Biosimilar Products into NewCo KENILWORTH, N.J., Feb. 5, 2020 – Merck (NYSE: MRK), known as MSD outside the United States and Canada, today announced financial results for thefourth quarter and full year of 2019.

“As evidenced by our results and our 2020 guidance, Merck had an extraordinary year and is in a position of operational and financial strength,” said

Kenneth C. Frazier, chairman and chief executive officer, Merck. “It is this position of strength, born of our focused execution, that gives us the confidence to spinoff our Women’s Health, trusted Legacy Brands and Biosimilar products into a new company, which will position us to deliver even greater value to patients andshareholders.”

Financial Summary Fourth Quarter Year Ended

$ in millions, except EPS amounts 2019 2018 Change Change

Ex-Exchange Dec. 31, 2019

Dec. 31, 2018 Change

Change Ex-Exchange

Sales $ 11,868 $ 10,998 8% 9% $ 46,840 $ 42,294 11% 13%GAAP net income1 2,357 1,827 29% 29% 9,843 6,220 58% 61%Non-GAAP net income that excludes certainitems1,2* 2,978 2,745 8% 8% 13,382 11,621 15% 16%GAAP EPS 0.92 0.69 33% 32% 3.81 2.32 64% 67%Non-GAAP EPS that excludes certain items2* 1.16 1.04 12% 12% 5.19 4.34 20% 21%

*Refer to table on page 10.

GAAP (generally accepted accounting principles) earnings per share assuming dilution (EPS) was $0.92 for the fourth quarter and $3.81 for the full yearof 2019. GAAP EPS for the full year of 2019 reflects a $993 million charge for the acquisition of Peloton Therapeutics, Inc. (Peloton) and a $612 million pretaxintangible asset impairment charge related to SIVEXTRO (tedizolid phosphate). Non-GAAP EPS of $1.16 for the fourth quarter and $5.19 for the full year of 2019excludes acquisition- and divestiture-related costs, restructuring costs and certain other items. Non-GAAP EPS for the full year of 2019 also excludes the chargefor the acquisition of Peloton and the SIVEXTRO impairment charge. Oncology Pipeline Highlights

Merck continued to advance the development programs for KEYTRUDA (pembrolizumab), the company’s anti-PD-1 therapy; Lynparza (olaparib), a

PARP inhibitor being co-developed and co-commercialized with AstraZeneca; and Lenvima (lenvatinib mesylate), an orally available tyrosine kinase inhibitorbeing co-developed and co-commercialized with Eisai Co., Ltd. (Eisai). · Merck announced the following regulatory milestones for KEYTRUDA: o Approval in the United States by the Food and Drug Administration (FDA) as monotherapy for the treatment of certain patients with high-risk, non-

muscle invasive bladder cancer (NMIBC) based on the KEYNOTE-057 trial; o Approval in Japan for three new first-line indications across advanced renal cell carcinoma (RCC) based on the KEYNOTE-426 trial and recurrent or

distant metastatic head and neck cancer based on the KEYNOTE-048 trial; o Approval in China for first-line treatment of metastatic squamous non-small cell lung cancer (NSCLC) in combination with chemotherapy based on the

KEYNOTE-407 trial; and 1 Net income attributable to Merck & Co., Inc.2 Merck is providing certain 2019 and 2018 non-GAAP information that excludes certain items because of the nature of these items and the impact they have onthe analysis of underlying business performance and trends. Management believes that providing this information enhances investors’ understanding of thecompany’s results and permits investors to understand how management assesses performance. Management uses these measures internally for planning andforecasting purposes and to measure the performance of the company along with other metrics. Senior management’s annual compensation is derived in partusing non-GAAP income and non-GAAP EPS. This information should be considered in addition to, but not as a substitute for or superior to, informationprepared in accordance with GAAP. For a description of the items, see Tables 2a and 2b attached to this release.

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o Approval in Europe for two new regimens of KEYTRUDA, as monotherapy or in combination with chemotherapy, for the first-line treatment of

metastatic or unresectable recurrent head and neck squamous cell carcinoma (HNSCC) in adults whose tumors express PD-L1 with a Combined PositiveScore (CPS) >1 based on the KEYNOTE-048 trial.

· Merck presented results from an exploratory analysis of the pivotal Phase 3 KEYNOTE-042 trial that showed KEYTRUDA improved overall survival asmonotherapy for the first-line treatment of metastatic NSCLC regardless of KRAS mutational status.

· Merck announced that the Phase 3 KEYNOTE-604 trial investigating KEYTRUDA in combination with chemotherapy significantly improved progression-free survival (PFS) compared to chemotherapy alone in the first-line treatment of patients with extensive-stage small cell lung cancer (ES-SCLC) but did notmeet the other dual primary endpoint of overall survival.

· Merck and AstraZeneca announced the following regulatory milestones for Lynparza:o Approval in the United States by the FDA as first-line maintenance treatment of germline BRCA-mutated (BRCAm) metastatic pancreatic cancer in

patients whose disease had not progressed on at least 16 weeks of a first-line platinum-based chemotherapy regimen based on the Phase 3 POLO trial;o Approval in China as a first-line maintenance therapy in BRCAm advanced ovarian cancer following response to platinum-based chemotherapy based on

the Phase 3 SOLO-1 trial;o Filing acceptance for priority review by the FDA for a supplemental New Drug Application (sNDA) seeking approval of Lynparza in combination with

bevacizumab for the maintenance treatment of women with advanced ovarian cancer whose disease showed a complete or partial response to first-linetreatment with platinum-based chemotherapy and bevacizumab based on results from the Phase 3 PAOLA-1 trial. A Prescription Drug User Fee Act(PDUFA) date is set for the second quarter of 2020; and

o Filing acceptance for priority review by the FDA for a sNDA for the treatment of patients with metastatic castration-resistant prostate cancer (mCRPC)and deleterious or suspected deleterious germline or somatic homologous recombination repair (HRR) gene mutations, who have progressed followingprior treatment with a new hormonal agent based on results from the Phase 3 PROfound trial. A PDUFA date is set for the second quarter of 2020.

· Merck and AstraZeneca announced filing acceptance for priority review by the FDA of a New Drug Application (NDA) for selumetinib, an oral MEK 1/2inhibitor, for the treatment of certain pediatric patients with neurofibromatosis Type 1 (NF1) based on the results from the National Cancer Institute (NCI)Cancer Therapy Evaluation Program (CTEP)-sponsored SPRINT Phase 2 Stratum 1 trial. A PDUFA date is set for the second quarter of 2020.

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Other Pipeline Highlights · Merck announced conditional approval in Europe as well as U.S. approval for ERVEBO (Ebola Zaire Vaccine, Live) for the prevention of disease caused by

Zaire ebolavirus in individuals 18 years of age and older.· Merck announced FDA approval of DIFICID (fidaxomicin) tablets and oral suspension for the treatment of Clostridioides difficile-associated diarrhea

(CDAD) in children aged six months and older.· Merck announced the adoption of a positive opinion by the Committee for Medicinal Products for Human Use (CHMP) of the European Medicines Agency

(EMA) for RECARBRIO (imipenem, cilastatin, and relebactam) for the treatment of infections due to aerobic gram-negative organisms in adults with limitedtreatment options.

· Merck announced filing acceptance for priority review by the FDA for a sNDA seeking approval of RECARBRIO to treat adult patients with hospital-acquired bacterial pneumonia and ventilator-associated bacterial pneumonia (HABP/VABP) caused by certain susceptible Gram-negative microorganisms.The PDUFA date is June 4, 2020.

· Merck announced that the Phase 3 VICTORIA study evaluating vericiguat, a soluble guanylate cyclase (sGC) stimulator being jointly developed with BayerAG, met its primary composite endpoint in reducing the risk of heart failure hospitalization or cardiovascular death in patients with worsening chronic heartfailure with reduced ejection fraction (HFrEF) compared to placebo when given in combination with available heart failure therapies.

Business Development · Merck acquired ArQule, Inc., diversifying its oncology portfolio with the expansion into targeted therapies that treat hematological malignancies with the

addition of ARQ 531, a novel, oral Bruton’s tyrosine kinase (BTK) inhibitor currently in a Phase 2 development, among other candidates. The acquisitionclosed in January 2020.

· Merck entered into a strategic oncology collaboration with Taiho Pharmaceutical Co., Ltd., and Astex Pharmaceuticals focused on the development of smallmolecule inhibitors against several drug targets, including the KRAS oncogene, which are currently being investigated for the treatment of cancer.

· Merck Animal Health acquired Vaki, a leader in fish farming monitoring equipment and real-time video monitoring technology to advance fish health andwelfare. The acquisition closed in December.

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Fourth-Quarter and Full-Year Revenue Performance

The following table reflects sales of the company’s top pharmaceutical products, as well as sales of animal health products.

Fourth Quarter Year Ended

$ in millions 2019 2018 Change Change

Ex-Exchange Dec. 31,

2019 Dec. 31,

2018 Change Change

Ex-Exchange Total Sales $ 11,868 $ 10,998 8% 9% $ 46,840 $ 42,294 11% 13%Pharmaceutical 10,533 9,830 7% 8% 41,751 37,689 11% 14%KEYTRUDA 3,111 2,151 45% 46% 11,084 7,171 55% 58%JANUVIA / JANUMET 1,418 1,465 -3% -2% 5,524 5,914 -7% -4%GARDASIL / GARDASIL 9 693 835 -17% -16% 3,737 3,151 19% 21%PROQUAD, M-M-R II and VARIVAX 481 455 6% 7% 2,275 1,798 27% 28%PNEUMOVAX 23 334 322 4% 4% 926 907 2% 3%BRIDION 313 256 22% 24% 1,131 917 23% 26%ROTATEQ 227 188 21% 21% 791 728 9% 10%ISENTRESS / ISENTRESS HD 223 280 -20% -18% 975 1,140 -15% -10%IMPLANON / NEXPLANON 206 169 22% 23% 787 703 12% 14%SIMPONI 205 220 -7% -3% 830 893 -7% -2%

Animal Health 1,122 1,036 8% 10% 4,393 4,212 4% 9%Livestock 777 684 14% 16% 2,784 2,630 6% 11%Companion Animals 345 352 -2% 0% 1,609 1,582 2% 5%

Other Revenues 213 132 61% 30% 696 393 77% -26% Pharmaceutical Revenue

Fourth-quarter pharmaceutical sales increased 7% to $10.5 billion, excluding the unfavorable effect from foreign exchange, sales grew 8%. The increasewas driven primarily by growth in oncology, partially offset by the ongoing impacts of the loss of market exclusivity for several products. Additionally, fourthquarter 2019 sales were reduced by $120 million due to a previously disclosed borrowing of doses of GARDASIL 9 (Human Papillomavirus 9-valent Vaccine,Recombinant) from the U.S. Centers for Disease Control and Prevention’s (CDC) Pediatric Vaccine Stockpile. Sales in the fourth quarter of 2018 were increasedby $125 million due to the replenishment of previously borrowed doses of GARDASIL 9.

Growth in oncology was largely driven by sales of KEYTRUDA, which were $3.1 billion for the quarter, reflecting strong momentum from the NSCLC

indications as well as continued uptake in other indications, including the recently launched RCC and adjuvant melanoma indications. Additionally, oncology salesreflect alliance revenue of $132 million related to Lynparza and $124 million related to Lenvima, representing Merck’s share of profits, which are product sales netof cost of sales and commercialization costs.

Performance in vaccines for the fourth quarter reflects the negative impact of borrowing doses of GARDASIL 9 from the CDC Pediatric Vaccine

Stockpile as discussed above, partially offset by higher demand in Europe and China, as well as higher demand and pricing in the United States. Excluding theborrowing-related activity in both periods, GARDASIL [Human Papillomavirus Quadrivalent (Types 6, 11, 16 and 18) Vaccine, Recombinant] and GARDASIL 9sales grew 15% in the quarter, including a 1% negative impact from foreign exchange.

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Performance in hospital acute care reflects higher demand globally, particularly in the United States, for BRIDION (sugammadex) Injection 100 mg/mL,

a medicine for the reversal of neuromuscular blockade induced by rocuronium bromide or vecuronium bromide in adults undergoing surgery; and the ongoinglaunch of PREVYMIS (letermovir), a medicine for prophylaxis (prevention) of cytomegalovirus (CMV) infection and disease in adult CMV-seropositive recipientsof an allogeneic hematopoietic stem cell transplant.

Pharmaceutical sales growth for the quarter was partially offset by the ongoing impacts from the loss of market exclusivity, including for NOXAFIL

(posaconazole), EMEND (aprepitant), ZETIA (ezetimibe) and VYTORIN (ezetimibe/simvastatin), CUBICIN (daptomycin) and REMICADE (infliximab). Ageneric entrant of NUVARING (etonogestrel/ethinyl estradiol vaginal ring) in the U.S. also negatively affected sales for the quarter and will continue to negativelyaffect sales in the future. In addition, the decline in sales of JANUVIA (sitagliptin) and JANUMET (sitagliptin and metformin HCI) reflects continued pricingpressure in the United States, which more than offset higher demand globally.

Full-year 2019 pharmaceutical sales increased 11% to $41.8 billion; excluding the unfavorable effect from foreign exchange, sales grew 14%, primarily

reflecting growth in oncology and vaccines, partially offset by the ongoing effects from the loss of market exclusivity for several products and continued pricingpressure in diabetes. Animal Health Revenue

Animal Health sales totaled $1.1 billion for the fourth quarter of 2019, an increase of 8% compared with the fourth quarter of 2018; excluding theunfavorable effect from foreign exchange, Animal Health sales grew 10%. Growth for the quarter was mainly driven by livestock products due to the Antelliqacquisition.

Worldwide sales for the full year of 2019 were $4.4 billion, an increase of 4%; excluding the unfavorable effect from foreign exchange, sales grew 9%.

Full-year sales growth was mainly driven by livestock products due to the Antelliq acquisition, along with higher sales of companion animal products, primarilythe BRAVECTO (fluralaner) line of products for parasitic control.

Animal Health segment profits were $366 million in the fourth quarter of 2019, a decrease of 5% compared with $387 million in the fourth quarter of

2018, primarily driven by unfavorable product mix and higher investments in selling and product development, partially offset by higher sales. Segment profitswere $1.6 billion for the full year of 2019, a decrease of 3% compared with $1.7 billion in 2018, primarily driven by the unfavorable effects of foreign exchange.3

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Fourth-Quarter and Full-Year Expense, EPS and Related Information

The tables below present selected expense information.

$ in millions GAAP

Acquisition- and Divestiture-

Related Costs4 Restructuring

Costs Certain Other

Items Non-GAAP2 Fourth-Quarter 2019 Cost of sales $ 3,669 $ 325 $ 90 $ - $ 3,254 Selling, general and administrative 2,888 44 1 - 2,843 Research and development 2,548 166 - 11 2,371 Restructuring costs 194 - 194 - - Other (income) expense, net (223) (37) - 7 (193) Fourth-Quarter 2018 Cost of sales $ 3,289 $ 525 $ 10 $ 3 $ 2,751 Selling, general and administrative 2,643 6 1 - 2,636 Research and development 2,214 91 1 - 2,122 Restructuring costs 138 - 138 - - Other (income) expense, net 110 179 – (3) (66)

$ in millions GAAP

Acquisition- and Divestiture-

Related Costs4 Restructuring

Costs Certain Other

Items Non-GAAP2 Year Ended Dec. 31, 2019 Cost of sales $ 14,112 $ 2,126 $ 251 $ - $ 11,735 Selling, general and administrative 10,615 126 34 - 10,455 Research and development 9,872 145 4 993 8,730 Restructuring costs 638 - 638 - - Other (income) expense, net 139 284 - 55 (200) Year Ended Dec. 31, 2018 Cost of sales $ 13,509 $ 2,672 $ 21 $ 423 $ 10,393 Selling, general and administrative 10,102 32 3 - 10,067 Research and development 9,752 98 2 1,744 7,908 Restructuring costs 632 - 632 - - Other (income) expense, net (402) 264 - (57) (609) GAAP Expense, EPS and Related Information

Gross margin was 69.1% for the fourth quarter of 2019 compared to 70.1% for the fourth quarter of 2018. The decrease reflects unfavorable

manufacturing variances, inventory write-offs, higher amortization of intangible assets related to collaborations, the unfavorable effects of pricing pressure andrestructuring costs, partially offset by favorable product mix and lower acquisition- and divestiture-related costs. 3 Animal Health segment profits are comprised of segment sales, less all cost of sales, as well as selling, general and administrative expenses and research anddevelopment costs directly incurred by the segment. For internal management reporting, Merck does not allocate general and administrative expenses not directlyincurred by the segment, nor the cost of financing these activities. Separate divisions maintain responsibility for monitoring and managing these costs, includingdepreciation related to fixed assets utilized by these divisions and, therefore, they are not included in segment profits.4 Includes expenses for the amortization of intangible assets and purchase accounting adjustments to inventories recognized as a result of acquisitions, intangibleasset impairment charges, and expense or income related to changes in the estimated fair value measurement of liabilities for contingent consideration. Alsoincludes integration, transaction and certain other costs related to business acquisitions and divestitures.

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Gross margin was 69.9% for the full year of 2019 compared to 68.1% for the full year of 2018. The increase in gross margin for the full year of 2019

reflects a charge in 2018 related to the termination of a collaboration agreement with Samsung Bioepis Co., Ltd., favorable product mix and lower acquisition- anddivestiture-related costs, partially offset by unfavorable manufacturing variances, inventory write-offs, the unfavorable effects of pricing pressure, higheramortization of intangible assets related to collaborations and higher restructuring costs.

Selling, general and administrative expenses were $2.9 billion in the fourth quarter of 2019, an increase of 9% compared to the fourth quarter of 2018.

Full-year 2019 selling, general and administrative expenses were $10.6 billion, an increase of 5% compared to the full year of 2018. The increase in both periodsreflects higher administrative costs, acquisition- and divestiture-related costs, and promotion costs primarily in support of strategic brands, partially offset by thefavorable effects of foreign exchange.

Research and development (R&D) expenses were $2.5 billion in the fourth quarter of 2019, an increase of 15% compared with the fourth quarter of 2018.

R&D expenses were $9.9 billion for the full year of 2019, a 1% increase compared to the full year of 2018. The increase in both periods primarily reflects higherexpenses related to clinical development and increased investment in discovery research and early drug development. In addition, the increase for the full year of2019 was driven by a $993 million charge for the acquisition of Peloton. The increase in R&D expenses for the full year of 2019 was partially offset by charges in2018 including $1.4 billion related to the formation of an oncology collaboration with Eisai and $344 million related to the Viralytics Limited acquisition.

Other (income) expense, net, was $223 million of income in the fourth quarter of 2019 compared to $110 million of expense in the fourth quarter of 2018

primarily reflecting income from investments in equity securities in 2019 compared with losses in 2018. In addition, the fourth quarter of 2018 included goodwillimpairment charges. Other (income) expense, net, was $139 million of expense for the full year of 2019 compared to $402 million of income for the full year of2018 driven by lower income from investments in equity securities and higher net interest expense.

The effective income tax rates were 15.3% for the fourth quarter and 14.7% for full year of 2019. The effective income tax rate for the full year of 2019

reflects a net tax benefit of $364 million related to the settlement of certain federal income tax matters, partially offset by the unfavorable impact of the charge forthe acquisition of Peloton for which no tax benefit was recognized.

GAAP EPS was $0.92 for the fourth quarter of 2019 compared with $0.69 for the fourth quarter of 2018. GAAP EPS was $3.81 for the full year of 2019

compared with $2.32 for the full year of 2018.

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Non-GAAP Expense, EPS and Related Information

Non-GAAP gross margin was 72.6% for the fourth quarter of 2019 compared to 75.0% for the fourth quarter of 2018. Non-GAAP gross margin was

74.9% for the full year of 2019 compared to 75.4% for the full year of 2018. The decrease in both periods reflects unfavorable manufacturing variances, inventorywrite-offs, the unfavorable effects of pricing pressure and higher amortization of intangible assets related to collaborations, partially offset by favorable productmix.

Non-GAAP selling, general and administrative expenses were $2.8 billion in the fourth quarter of 2019, an increase of 8% compared to the fourth quarter

of 2018. Full-year 2019 non-GAAP selling, general and administrative expenses were $10.5 billion, an increase of 4% compared to the full year of 2018. Theincrease in both periods primarily reflects higher administrative costs and higher promotion costs primarily in support of strategic brands, partially offset by thefavorable effects of foreign exchange.

Non-GAAP R&D expenses were $2.4 billion in the fourth quarter of 2019, a 12% increase compared to the fourth quarter of 2018. Non-GAAP R&D

expenses were $8.7 billion for the full year of 2019, a 10% increase compared to the full year of 2018. The increases in both periods primarily reflect higherexpenses related to clinical development and increased investment in discovery research and early drug development.

Non-GAAP other (income) expense, net, was $193 million of income in the fourth quarter of 2019 compared to $66 million of income in the fourth

quarter of 2018, primarily reflecting income from investments in equity securities in 2019 compared with losses in 2018, partially offset by higher net interestexpense. Non-GAAP other (income) expense, net, for the full year of 2019 was $200 million of income compared to $609 million of income for the full year of2018, primarily driven by lower income from investments in equity securities and higher net interest expense.

The non-GAAP effective income tax rates were 16.9% for the fourth quarter of 2019 and 16.8% for the full year of 2019. Non-GAAP EPS was $1.16 for the fourth quarter of 2019 compared with $1.04 for the fourth quarter of 2018. Non-GAAP EPS was $5.19 for the full year

of 2019 compared with $4.34 for the full year of 2018. A reconciliation of GAAP to non-GAAP net income and EPS is provided in the table that follows.

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Fourth Quarter Year Ended $ in millions, except EPS amounts 2019 2018 Dec. 31, 2019 Dec. 31, 2018 EPS GAAP EPS $ 0.92 $ 0.69 $ 3.81 $ 2.32 Difference5 0.24 0.35 1.38 2.02 Non-GAAP EPS that excludes items listed below2 $ 1.16 $ 1.04 $ 5.19 $ 4.34 Net Income GAAP net income1 $ 2,357 $ 1,827 $ 9,843 $ 6,220 Difference 621 918 3,539 5,401 Non-GAAP net income that excludes items listed below1,2 $ 2,978 $ 2,745 $ 13,382 $ 11,621 Decrease (Increase) in Net Income Due to Excluded Items: Acquisition- and divestiture-related costs4 $ 498 $ 801 $ 2,681 $ 3,066 Restructuring costs 285 150 927 658 Charge for the acquisition of Peloton 11 - 993 - Charge related to termination of a collaboration agreement with Samsung - 3 - 423 Charge related to formation of a collaboration with Eisai - - - 1,400 Charge for the acquisition of Viralytics - - - 344 Other 7 (3) 55 (57)

Net decrease (increase) in income before taxes 801 951 4,656 5,834 Income tax (benefit) expense6 (180) 25 (1,028) (375)Acquisition- and divestiture-related costs attributable to non-controllinginterests - (58) (89) (58)Decrease (increase) in net income $ 621 $ 918 $ 3,539 $ 5,401 Financial Outlook

At mid-January 2020 exchange rates, Merck anticipates full-year 2020 revenue to be between $48.8 billion and $50.3 billion, including a negative impact

from foreign exchange of less than 1%. Merck expects full-year 2020 GAAP EPS to be between $4.57 and $4.72. Merck expects full-year 2020 non-GAAP EPS to be between $5.62 and $5.77,

including an approximately 1.5% negative impact from foreign exchange. The non-GAAP range excludes acquisition- and divestiture-related costs and costsrelated to restructuring programs.

The following table summarizes the company’s full-year 2020 financial guidance.

GAAP Non-GAAP2 Revenue $48.8 to $50.3 billion $48.8 to $50.3 billion* Operating expenses Slightly lower than 2019 Higher than 2019 by a low-single-digit rate Effective tax rate 17% to 18% 17.5% to 18.5% EPS** $4.57 to $4.72 $5.62 to $5.77

*The company does not have any non-GAAP adjustments to revenue.**EPS guidance for 2020 assumes a share count (assuming dilution) of approximately 2.54 billion shares.

5 Represents the difference between calculated GAAP EPS and calculated non-GAAP EPS, which may be different than the amount calculated by dividing theimpact of the excluded items by the weighted-average shares for the period.6 Includes the estimated tax impact on the reconciling items. Amounts for full-year 2019 include a $364 million net tax benefit related to the settlement of certainfederal income tax matters, an $86 million tax benefit related to the reversal of tax reserves established in conjunction with the divestiture of Merck’s ConsumerCare business in 2014 as a result of the lapse in the statute of limitations, and a $117 million tax charge related to the finalization of treasury regulationsassociated with the 2017 enactment of U.S. tax legislation. Amounts for fourth-quarter and full-year 2018 include adjustments to the provisional amountsrecorded in 2017 related to the enactment of the U.S. tax legislation.

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A reconciliation of anticipated 2020 GAAP EPS to non-GAAP EPS and the items excluded from non-GAAP EPS are provided in the table below.

$ in millions, except EPS amounts Full-Year 2020 GAAP EPS $4.57 to $4.72 Difference5 1.05 Non-GAAP EPS that excludes items listed below2 $5.62 to $5.77 Acquisition- and divestiture-related costs $ 2,500 Restructuring costs 800 Net decrease (increase) in income before taxes 3,300 Estimated income tax (benefit) expense (640)Decrease (increase) in net income $ 2,660 Earnings Conference Call

Investors, journalists and the general public may access a live audio webcast of the call today at 8:00 a.m. EST on Merck’s website at

https://investors.merck.com/events-and-presentations/default.aspx. Institutional investors and analysts can participate in the call by dialing (706) 758-9927 or (877)381-5782 and using ID code number 8583879. Members of the media are invited to monitor the call by dialing (706) 758-9928 or (800) 399-7917 and using IDcode number 8583879. Journalists who wish to ask questions are requested to contact a member of Merck’s Media Relations team at the conclusion of the call. About Merck

For more than 125 years, Merck, known as MSD outside of the United States and Canada, has been inventing for life, bringing forward medicines and

vaccines for many of the world’s most challenging diseases in pursuit of our mission to save and improve lives. We demonstrate our commitment to patients andpopulation health by increasing access to health care through far-reaching policies, programs and partnerships. Today, Merck continues to be at the forefront ofresearch to prevent and treat diseases that threaten people and animals – including cancer, infectious diseases such as HIV and Ebola, and emerging animaldiseases – as we aspire to be the premier research-intensive biopharmaceutical company in the world. For more information, visit www.merck.com and connectwith us on Twitter, Facebook, Instagram, YouTube and LinkedIn.

Page 11

Forward-Looking Statement of Merck & Co., Inc., Kenilworth, N.J., USA

This news release of Merck & Co., Inc., Kenilworth, N.J., USA (the “company”) includes “forward-looking statements” within the meaning of the safe

harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Examples of forward-looking statements include statements with respect to thecompany’s plans to spin-off certain of its businesses into an independent company, the timing and structure of such spin-off, the characteristics of the business tobe separated, the expected benefits of the spin-off to the company and the expected effect on the company’s dividends. These statements are based upon the currentbeliefs and expectations of the company’s management and are subject to significant risks and uncertainties. There can be no guarantees with respect to whetherthe proposed spin-off will be completed on the proposed timetable or at all. If underlying assumptions prove inaccurate or risks or uncertainties materialize, actualresults may differ materially from those set forth in the forward-looking statements.

Risks and uncertainties include but are not limited to, uncertainties as to the timing of the proposed spin-off; uncertainties as to the status of any required

regulatory approvals; the possibility that various conditions to the consummation of the spin-off may not be satisfied; the effects of disruption from the transactionscontemplated in connection with the spin-off; general industry conditions and competition; general economic factors, including interest rate and currency exchangerate fluctuations; the impact of pharmaceutical industry regulation and health care legislation in the United States and internationally; global trends toward healthcare cost containment; technological advances, new products and patents attained by competitors; challenges inherent in new product development, includingobtaining regulatory approval; the company’s ability to accurately predict future market conditions; manufacturing difficulties or delays; financial instability ofinternational economies and sovereign risk; dependence on the effectiveness of the company’s patents and other protections for innovative products; and theexposure to litigation, including patent litigation, and/or regulatory actions.

The company undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future events or

otherwise. Additional factors that could cause results to differ materially from those described in the forward-looking statements can be found in the company’s2018 Annual Report on Form 10-K and the company’s other filings with the Securities and Exchange Commission (SEC) available at the SEC’s Internet site(www.sec.gov).

# # #

Page 12

MERCK & CO., INC.CONSOLIDATED STATEMENT OF INCOME - GAAP

(AMOUNTS IN MILLIONS, EXCEPT PER SHARE FIGURES)(UNAUDITED)

Table 1

GAAP GAAP

4Q19 4Q18 % Change Full Year

2019 Full Year

2018 % Change Sales $ 11,868 $ 10,998 8% $ 46,840 $ 42,294 11% Costs, Expenses and Other Cost of sales (1) 3,669 3,289 12% 14,112 13,509 4%Selling, general and administrative (1) 2,888 2,643 9% 10,615 10,102 5%Research and development (1)(2) 2,548 2,214 15% 9,872 9,752 1%Restructuring costs (3) 194 138 41% 638 632 1%Other (income) expense, net (1) (223) 110 * 139 (402) *

Income Before Taxes 2,792 2,604 7% 11,464 8,701 32%Taxes on Income (1) 428 826 1,687 2,508 Net Income 2,364 1,778 33% 9,777 6,193 58%Less: Net Income (Loss) Attributable to NoncontrollingInterests (1) 7 (49) (66) (27) Net Income Attributable to Merck & Co., Inc. $ 2,357 $ 1,827 29% $ 9,843 $ 6,220 58%Earnings per Common Share Assuming Dilution $ 0.92 $ 0.69 33% $ 3.81 $ 2.32 64% Average Shares Outstanding Assuming Dilution 2,559 2,634 2,580 2,679 Tax Rate (4) 15.3% 31.7% 14.7% 28.8% * 100% or greater (1) Amounts include the impact of acquisition and divestiture-related costs, restructuring costs and certain other items. See accompanying tables for details. (2) Research and development expenses for the full year of 2019 include a $993 million charge for the acquisition of Peloton Therapeutics (Peloton). Research anddevelopment expenses for the full year of 2018 include a $1.4 billion charge related to the formation of a collaboration with Eisai Co., Ltd. (Eisai), as well as a$344 million charge for the acquisition of Viralytics Limited. (3) Represents separation and other related costs associated with restructuring activities under the company's formal restructuring programs. (4) The effective income tax rates for the fourth quarter and the full year of 2019 include the unfavorable impact of a charge for the acquisition of Peloton for whichno tax benefit was recognized and the favorable impact of product mix. The effective income tax rate for the full year of 2019 also reflects a net tax benefit of $364million related to the settlement of certain federal income tax matters. The effective income tax rates for the fourth quarter and full year of 2018 include the unfavorable impact of adjustments to the provisional amounts recorded in theprior year associated with the enactment of U.S. tax legislation, including $124 million related to the transition tax. The effective income tax rate for the full yearof 2018 also includes the unfavorable impacts of a charge related to the formation of a collaboration with Eisai and a charge related to the termination of acollaboration agreement with Samsung for which no tax benefits were recognized.

MERCK & CO., INC.

GAAP TO NON-GAAP RECONCILIATIONFOURTH QUARTER 2019


Table 2a

GAAP

Acquisition and Divestiture-Related

Costs (1) Restructuring

Costs (2) Certain Other

Items Adjustment

Subtotal Non-GAAP Cost of sales $ 3,669 325 90 415 $ 3,254 Selling, general andadministrative 2,888 44 1 45 2,843 Research and development 2,548 166 11 177 2,371 Restructuring costs 194 194 194 - Other (income) expense, net (223) (37) 7 (30) (193)Income Before Taxes 2,792 (498) (285) (18) (801) 3,593 Income Tax Provision (Benefit) 428 (55)(3) (49)(3) (76)(4) (180) 608 Net Income 2,364 (443) (236) 58 (621) 2,985 Net Income Attributable to Merck& Co., Inc. 2,357 (443) (236) 58 (621) 2,978 Earnings per Common ShareAssuming Dilution $ 0.92 (0.17) (0.09) 0.02 (0.24) $ 1.16 Tax Rate 15.3% 16.9%

Only the line items that are affected by non-GAAP adjustments are shown. Merck is providing certain non-GAAP information that excludes certain items because of the nature of these items and the impact they have on the analysis ofunderlying business performance and trends. Management believes that providing this information enhances investors’ understanding of the company’s results as itpermits investors to understand how management assesses performance. Management uses these measures internally for planning and forecasting purposes and tomeasure the performance of the company along with other metrics. Senior management’s annual compensation is derived in part using non-GAAP income andnon-GAAP EPS. This information should be considered in addition to, but not as a substitute for or superior to, information prepared in accordance with GAAP.

(1) Amount included in cost of sales primarily reflects $306 million of expenses for the amortization of intangible assets recognized as a result of businessacquisitions, as well as $12 million of intangible asset impairment charges. Amount included in selling, general and administrative expenses primarily reflectsintegration, transaction and certain other costs related to business acquisitions and divestitures. Amount included in research and development expenses primarilyreflects $164 million of in-process research and development (IPR&D) impairment charges.

(2) Amounts primarily include employee separation costs and accelerated depreciation associated with facilities to be closed or divested related to activities underthe company's formal restructuring programs.

(3) Represents the estimated tax impact on the reconciling items based on applying the statutory rate of the originating territory of the non-GAAP adjustments.

(4) Primarily reflects an $86 million tax benefit related to the reversal of tax reserves established in conjunction with the divestiture of Merck's Consumer Carebusiness in 2014 as a result of the lapse in the statute of limitations.

MERCK & CO., INC.

GAAP TO NON-GAAP RECONCILIATIONFULL YEAR 2019


Table 2b

GAAP

Acquisition and Divestiture-Related

Costs (1) Restructuring

Costs (2) Certain Other

Items (4) Adjustment

Subtotal Non-GAAP Cost of sales $ 14,112 2,126 251 2,377 $ 11,735 Selling, general and administrative 10,615 126 34 160 10,455 Research and development 9,872 145 4 993 1,142 8,730 Restructuring costs 638 638 638 - Other (income) expense, net 139 284 55 339 (200)Income Before Taxes 11,464 (2,681) (927) (1,048) (4,656) 16,120 Income Tax Provision (Benefit) 1,687 (493)(3) (155)(3) (380)(5) (1,028) 2,715 Net Income 9,777 (2,188) (772) (668) (3,628) 13,405 Less: Net (Loss) Income Attributable toNoncontrolling Interests (66) (89) (89) 23 Net Income Attributable to Merck &Co., Inc. 9,843 (2,099) (772) (668) (3,539) 13,382 Earnings per Common Share AssumingDilution $ 3.81 (0.82) (0.30) (0.26) (1.38) $ 5.19 Tax Rate 14.7% 16.8% Only the line items that are affected by non-GAAP adjustments are shown. Merck is providing certain non-GAAP information that excludes certain items because of the nature of these items and the impact they have on the analysis ofunderlying business performance and trends. Management believes that providing this information enhances investors’ understanding of the company’s results as itpermits investors to understand how management assesses performance. Management uses these measures internally for planning and forecasting purposes and tomeasure the performance of the company along with other metrics. Senior management’s annual compensation is derived in part using non-GAAP income andnon-GAAP EPS. This information should be considered in addition to, but not as a substitute for or superior to, information prepared in accordance with GAAP. (1) Amount included in cost of sales primarily reflects $1.4 billion of expenses for the amortization of intangible assets recognized as a result of businessacquisitions, as well as $705 million of intangible asset impairment charges, including $612 million related to SIVEXTRO. Amount included in selling, generaland administrative expenses primarily reflects integration, transaction and certain other costs related to business acquisitions and divestitures, including costsrelated to the acquisition of Antelliq Corporation. Amounts included in research and development expenses primarily reflect $172 million of in-process researchand development (IPR&D) impairment charges, partially offset by a reduction in expenses related to a decrease in the estimated fair value measurement ofliabilities for contingent consideration. Amount included in other (income) expense, net primarily reflects goodwill and intangible asset impairment chargesrelated to certain businesses in the Healthcare Services segment and expenses related to an increase in the estimated fair value measurement of liabilities forcontingent consideration, partially offset by royalty income related to the termination of the Sanofi-Pasteur MSD joint venture. (2) Amounts primarily include employee separation costs and accelerated depreciation associated with facilities to be closed or divested related to activities underthe company's formal restructuring programs. (3) Represents the estimated tax impact on the reconciling items based on applying the statutory rate of the originating territory of the non-GAAP adjustments. (4) Amount included in research and development represents the charge related to the acquisition of Peloton. (5) Primarily reflects a $364 million net tax benefit related to the settlement of certain federal income tax matters, an $86 million tax benefit related to the reversalof tax reserves established in conjunction with the divestiture of Merck's Consumer Care business in 2014 as a result of the lapse in the statute of limitations, and a$117 million tax charge related to the finalization of treasury regulations associated with the 2017 enactment of U.S. tax legislation.

MERCK & CO., INC.

FRANCHISE / KEY PRODUCT SALES(AMOUNTS IN MILLIONS)

(UNAUDITED)Table 3

2019 2018 4Q Full Year

1Q 2Q 3Q 4Q Full Year 1Q 2Q 3Q 4Q Full Year Nom % Ex-Exch % Nom % Ex-Exch % TOTAL SALES (1) $ 10,816 $ 11,760 $ 12,397 $ 11,868 $ 46,840 $ 10,037 $ 10,465 $ 10,794 $ 10,998 $ 42,294 8 9 11 13

PHARMACEUTICAL 9,663 10,460 11,095 10,533 41,751 8,919 9,282 9,658 9,830 37,689 7 8 11 14 Oncology

Keytruda 2,269 2,634 3,070 3,111 11,084 1,464 1,667 1,889 2,151 7,171 45 46 55 58 Alliance Revenue –Lynparza (2) 79 111 123 132 444 33 44 49 62 187 111 112 137 141 Alliance Revenue –Lenvima (2) 74 97 109 124 404 0 35 43 71 149 74 73 171 173 Emend 117 121 98 53 388 125 148 123 126 522 -58 -58 -26 -24

Vaccines (3) Gardasil / Gardasil 9 838 886 1,320 693 3,737 660 608 1,048 835 3,151 -17 -16 19 21 ProQuad / M-M-R II /Varivax 496 675 623 481 2,275 392 426 525 455 1,798 6 7 27 28 Pneumovax 23 185 170 237 334 926 179 193 214 322 907 4 4 2 3 RotaTeq 211 172 180 227 791 193 156 191 188 728 21 21 9 10 Vaqta 47 58 62 71 238 37 65 66 72 239 -2 -1 0 2

Hospital Acute Care Bridion 255 278 284 313 1,131 204 240 217 256 917 22 24 23 26 Noxafil 190 193 177 103 662 176 188 188 191 742 -46 -44 -11 -7 Primaxin 59 71 77 67 273 72 68 72 53 265 25 27 3 7 Invanz 72 78 57 57 263 151 149 137 59 496 -5 -2 -47 -44 Cubicin 88 67 52 50 257 98 94 95 80 367 -38 -37 -30 -28 Cancidas 61 67 62 58 249 91 87 79 69 326 -17 -15 -24 -20

Immunology Simponi 208 214 203 205 830 231 233 210 220 893 -7 -3 -7 -2 Remicade 123 98 101 89 411 167 157 135 123 582 -27 -25 -29 -25

Neuroscience Belsomra 67 76 80 83 306 54 71 66 69 260 19 16 18 17

Virology Isentress / Isentress HD 255 247 250 223 975 281 305 275 280 1,140 -20 -18 -15 -10 Zepatier 114 108 83 66 370 131 113 104 108 455 -38 -38 -19 -16

Cardiovascular Zetia 140 156 147 146 590 305 226 165 162 857 -9 -11 -31 -30 Vytorin 97 76 57 54 285 167 155 92 83 497 -35 -33 -43 -40 Atozet 94 92 97 108 391 73 101 84 89 347 22 26 13 18 Adempas 90 104 107 117 419 68 75 94 91 329 28 29 27 30

Diabetes (4) Januvia 824 908 807 943 3,482 880 949 927 930 3,686 1 2 -6 -4 Janumet 530 533 503 475 2,041 544 585 563 535 2,228 -11 -9 -8 -5

Women's Health NuvaRing 219 240 241 179 879 216 236 234 216 902 -17 -17 -3 -2 Implanon / Nexplanon 199 183 199 206 787 174 174 186 169 703 22 23 12 14

Diversified Brands Singulair 191 160 152 195 698 175 185 161 187 708 4 5 -1 1 Cozaar / Hyzaar 103 109 116 113 442 120 125 103 105 453 8 9 -3 2 Nasonex 96 72 58 67 293 122 81 71 102 376 -34 -34 -22 -19 Arcoxia 75 75 72 67 288 83 84 83 86 335 -23 -22 -14 -10 Follistim AQ 57 63 62 58 241 67 70 60 70 268 -16 -15 -10 -7

Other Pharmaceutical (5) 1,140 1,268 1,229 1,265 4,901 1,186 1,189 1,109 1,215 4,705 4 6 4 7

ANIMAL HEALTH 1,025 1,124 1,122 1,122 4,393 1,065 1,090 1,021 1,036 4,212 8 10 4 9 Livestock 611 671 726 777 2,784 652 633 660 684 2,630 14 16 6 11 Companion Animals 414 453 396 345 1,609 413 457 361 352 1,582 -2 0 2 5

Other Revenues (6) 128 176 180 213 696 53 93 115 132 393 61 30 77 -26

Sum of quarterly amounts may not equal year-to-date amounts due to rounding. (1) Only select products are shown. (2) Alliance Revenue represents Merck’s share of profits, which are product sales net of cost of sales and commercialization costs. (3) Total Vaccines sales were $1,887 million, $2,037 million, $2,517 million and $1,928 million in the first, second, third and fourth quarters of 2019, respectively, and $1,561 million, $1,533 million, $2,159 million and $2,008 millionfor the first, second, third and fourth quarters of 2018, respectively. (4) Total Diabetes sales were $1,402 million, $1,480 million, $1,360 million and $1,472 million in the first, second, third and fourth quarters of 2019, respectively, and $1,433 million, $1,571 million, $1,506 million and $1,485 millionfor the first, second, third and fourth quarters of 2018, respectively. (5) Includes Pharmaceutical products not individually shown above. (6) Other Revenues are comprised primarily of Healthcare Services segment revenues, third-party manufacturing sales and miscellaneous corporate revenues, including revenue hedging activities.

Exhibit 99.2

MERCK & CO., INC.

CONSOLIDATED STATEMENT OF INCOME - GAAP(AMOUNTS IN MILLIONS, EXCEPT PER SHARE FIGURES)

(UNAUDITED)Table 1a

2019 2018 % Change

1Q 2Q 3Q 4Q Full Year 1Q 2Q 3Q 4Q Full Year 4Q Full Year Sales $ 10,816 $ 11,760 $ 12,397 $ 11,868 $ 46,840 $ 10,037 $ 10,465 $ 10,794 $ 10,998 $ 42,294 8% 11% Costs, Expenses and Other

Cost of sales 3,052 3,401 3,990 3,669 14,112 3,184 3,417 3,619 3,289 13,509 12% 4%Selling, general and administrative 2,425 2,712 2,589 2,888 10,615 2,508 2,508 2,443 2,643 10,102 9% 5%Research and development 1,931 2,189 3,204 2,548 9,872 3,196 2,274 2,068 2,214 9,752 15% 1%Restructuring costs 153 59 232 194 638 95 228 171 138 632 41% 1%Other (income) expense, net 188 140 35 (223) 139 (291) (48) (172) 110 (402) * *

Income Before Taxes 3,067 3,259 2,347 2,792 11,464 1,345 2,086 2,665 2,604 8,701 7% 32%Taxes on Income 205 615 440 428 1,687 604 370 707 826 2,508 Net Income 2,862 2,644 1,907 2,364 9,777 741 1,716 1,958 1,778 6,193 33% 58%Less: Net (Loss) Income Attributable toNoncontrolling Interests (53) (26) 6 7 (66) 5 9 8 (49) (27) Net Income Attributable to Merck &Co., Inc. $ 2,915 $ 2,670 $ 1,901 $ 2,357 $ 9,843 $ 736 $ 1,707 $ 1,950 $ 1,827 $ 6,220 29% 58%Earnings per Common Share AssumingDilution $ 1.12 $ 1.03 $ 0.74 $ 0.92 $ 3.81 $ 0.27 $ 0.63 $ 0.73 $ 0.69 $ 2.32 33% 64% Average Shares Outstanding AssumingDilution 2,603 2,588 2,572 2,559 2,580 2,710 2,696 2,678 2,634 2,679 Tax Rate 6.7% 18.9% 18.7% 15.3% 14.7% 44.9% 17.8% 26.5% 31.7% 28.8% * 100% or greater Sum of quarterly amounts may not equal year-to-date amounts due to rounding.

MERCK & CO., INC.

GAAP TO NON-GAAP RECONCILIATIONFOURTH QUARTER 2018


Table 2c

GAAP

Acquisition and Divestiture-

Related Costs (1)

Restructuring Costs (2)

Certain Other Items

Adjustment Subtotal Non-GAAP

Cost of sales $ 3,289 525 10 3 538 $ 2,751 Selling, general and administrative 2,643 6 1 7 2,636 Research and development 2,214 91 1 92 2,122 Restructuring costs 138 138 138 - Other (income) expense, net 110 179 (3) 176 (66)Income Before Taxes 2,604 (801) (150) - (951) 3,555 Income Tax Provision (Benefit) 826 (148)(3) (13)(3) 186(4) 25 801 Net Income 1,778 (653) (137) (186) (976) 2,754 Less: Net (Loss) Income Attributableto Noncontrolling Interests (49) (58) (58) 9 Net Income Attributable to Merck &Co., Inc. 1,827 (595) (137) (186) (918) 2,745 Earnings per Common ShareAssuming Dilution $ 0.69 (0.23) (0.05) (0.07) (0.35) $ 1.04 Tax Rate 31.7% 22.5% Only the line items that are affected by non-GAAP adjustments are shown. Merck is providing certain non-GAAP information that excludes certain items because of the nature of these items and the impact they have on the analysis ofunderlying business performance and trends. Management believes that providing this information enhances investors’ understanding of the company’s results as itpermits investors to understand how management assesses performance. Management uses these measures internally for planning and forecasting purposes and tomeasure the performance of the company along with other metrics. Senior management’s annual compensation is derived in part using non-GAAP income andnon-GAAP EPS. This information should be considered in addition to, but not as a substitute for or superior to, information prepared in accordance with GAAP. (1) Amounts included in cost of sales reflect expenses for the amortization of intangible assets recognized as a result of business acquisitions. Amounts included inselling, general and administrative expenses reflect integration, transaction and certain other costs related to business acquisitions and divestitures. Amountsincluded in research and development expenses reflect $149 million of in-process research and development (IPR&D) impairment charges, partially offset by areduction of expenses related to a decrease in the estimated fair value measurement of liabilities for contingent consideration. Amounts included in other (income)expense, net primarily reflect goodwill impairment charges related to certain businesses in the Healthcare Services segment and an increase in the estimated fairvalue measurement of liabilities for contingent consideration, partially offset by royalty income related to the termination of the Sanofi-Pasteur MSD joint venture. (2) Amounts primarily include employee separation costs and accelerated depreciation associated with facilities to be closed or divested related to activities underthe company's formal restructuring programs. (3) Represents the estimated tax impact on the reconciling items based on applying the statutory rate of the originating territory of the non-GAAP adjustments. (4) Includes the estimated tax impact on the reconciling items based on applying the statutory rate of the originating territory of the non-GAAP adjustments. Alsoincludes adjustments to the provisional amounts recorded in the prior year associated with the enactment of U.S. tax legislation, including $124 million related tothe transition tax.

MERCK & CO., INC.GAAP TO NON-GAAP RECONCILIATION

FULL YEAR 2018(AMOUNTS IN MILLIONS, EXCEPT PER SHARE FIGURES)

(UNAUDITED)Table 2d

GAAP

Acquisition and Divestiture-

Related Costs (1)

Restructuring Costs (2)

Certain Other Items (3)

Adjustment Subtotal Non-GAAP

Cost of sales $ 13,509 2,672 21 423 3,116 $ 10,393 Selling, general and administrative 10,102 32 3 35 10,067 Research and development 9,752 98 2 1,744 1,844 7,908 Restructuring costs 632 632 632 - Other (income) expense, net (402) 264 (57) 207 (609)Income Before Taxes 8,701 (3,066) (658) (2,110) (5,834) 14,535 Income Tax Provision (Benefit) 2,508 (378)(4) (82)(4) 85(5) (375) 2,883 Net Income 6,193 (2,688) (576) (2,195) (5,459) 11,652 Less: Net (Loss) Income Attributableto Noncontrolling Interests (27) (58) (58) 31 Net Income Attributable to Merck &Co., Inc. 6,220 (2,630) (576) (2,195) (5,401) 11,621 Earnings per Common ShareAssuming Dilution $ 2.32 (0.98) (0.22) (0.82) (2.02) $ 4.34 Tax Rate 28.8% 19.8% Only the line items that are affected by non-GAAP adjustments are shown. Merck is providing certain non-GAAP information that excludes certain items because of the nature of these items and the impact they have on the analysis ofunderlying business performance and trends. Management believes that providing this information enhances investors’ understanding of the company’s results as itpermits investors to understand how management assesses performance. Management uses these measures internally for planning and forecasting purposes and tomeasure the performance of the company along with other metrics. Senior management’s annual compensation is derived in part using non-GAAP income andnon-GAAP EPS. This information should be considered in addition to, but not as a substitute for or superior to, information prepared in accordance with GAAP. (1) Amounts included in cost of sales reflect expenses for the amortization of intangible assets recognized as a result of business acquisitions. Amounts included inselling, general and administrative expenses reflect integration, transaction and certain other costs related to business acquisitions and divestitures. Amountsincluded in research and development expenses reflect $152 million of in-process research and development (IPR&D) impairment charges, partially offset by areduction of expenses related to a decrease in the estimated fair value measurement of liabilities for contingent consideration. Amounts included in other (income)expense, net primarily reflect goodwill impairment charges related to certain businesses in the Healthcare Services segment and an increase in the estimated fairvalue measurement of liabilities for contingent consideration, partially offset by royalty income related to the termination of the Sanofi-Pasteur MSD joint venture. (2) Amounts primarily include employee separation costs and accelerated depreciation associated with facilities to be closed or divested related to activities underthe company's formal restructuring programs. (3) Amount included in cost of sales represents a charge related to the termination of a collaboration agreement with Samsung Bioepis Co., Ltd. for insulinglargine. Amounts included in research and development expenses represent a $1.4 billion charge related to the formation of a collaboration with Eisai Co., Ltd.,as well as a $344 million charge for the acquisition of Viralytics Limited. (4) Represents the estimated tax impact on the reconciling items based on applying the statutory rate of the originating territory of the non-GAAP adjustments. (5) Includes the estimated tax impact on the reconciling items based on applying the statutory rate of the originating territory of the non-GAAP adjustments. Alsoincludes adjustments to the provisional amounts recorded in the prior year associated with the enactment of U.S. tax legislation, including $124 million related tothe transition tax.

MERCK & CO., INC.FRANCHISE / KEY PRODUCT SALES

FOURTH QUARTER 2019(AMOUNTS IN MILLIONS)

(UNAUDITED)Table 3a

Global U.S. International 4Q 2019 4Q 2018 % Change 4Q 2019 4Q 2018 % Change 4Q 2019 4Q 2018 % Change TOTAL SALES (1) $ 11,868 $ 10,998 8 $ 5,142 $ 4,787 7 $ 6,726 $ 6,211 8

PHARMACEUTICAL 10,533 9,830 7 4,694 4,402 7 5,839 5,427 8 Oncology

Keytruda 3,111 2,151 45 1,780 1,243 43 1,331 907 47 Alliance Revenue - Lynparza (2) 132 62 111 82 39 113 49 24 107 Alliance Revenue - Lenvima (2) 124 71 74 70 46 53 53 25 111 Emend 53 126 -58 10 73 -86 42 53 -21

Vaccines (3) Gardasil / Gardasil 9 693 835 -17 252 450 -44 441 384 15 ProQuad / M-M-R II / Varivax 481 455 6 358 333 8 123 122 1 Pneumovax 23 334 322 4 251 232 8 83 89 -7 RotaTeq 227 188 21 146 112 30 81 76 7 Vaqta 71 72 -2 28 32 -13 43 40 8

Hospital Acute Care Bridion 313 256 22 152 114 33 162 142 14 Noxafil 103 191 -46 14 96 -85 89 95 -7 Primaxin 67 53 25 1 -168 67 52 28 Cancidas 58 69 -17 2 2 -21 56 67 -17 Invanz 57 59 -5 1 -102 57 58 -3 Cubicin 50 80 -38 13 41 -67 36 39 -8

Immunology Simponi 205 220 -7 205 220 -7 Remicade 89 123 -27 89 123 -27

Neuroscience Belsomra 83 69 19 24 20 18 59 49 20

Virology Isentress / Isentress HD 223 280 -20 95 130 -27 128 150 -15 Zepatier 66 108 -38 23 * 44 108 -60

Cardiovascular Zetia 146 162 -9 3 11 -73 144 151 -5 Vytorin 54 83 -35 4 (1) * 49 84 -41 Atozet 108 89 22 108 89 22 Adempas 117 91 28 117 91 28

Diabetes (4) Januvia 943 930 1 502 503 441 427 3 Janumet 475 535 -11 127 185 -31 348 350 -1

Women's Health Implanon / Nexplanon 206 169 22 147 120 22 59 48 21 NuvaRing 179 216 -17 150 171 -13 29 45 -35

Diversified Brands Singulair 195 187 4 5 4 14 190 183 4 Cozaar / Hyzaar 113 105 8 8 4 83 105 101 4 Nasonex 67 102 -34 7 15 -53 60 87 -31 Arcoxia 67 86 -23 67 86 -23 Follistim AQ 58 70 -16 22 33 -32 36 37 -3

Other Pharmaceutical (5) 1,265 1,215 4 419 392 7 848 825 3 ANIMAL HEALTH 1,122 1,036 8 341 314 9 781 722 8 Livestock 777 684 14 177 144 23 600 540 11 Companion Animals 345 352 -2 164 170 -3 181 183 -1

Other Revenues (6) 213 132 61 107 71 51 106 62 72

* 200% or greater (1) Only select products are shown. (2) Alliance Revenue represents Merck’s share of profits, which are product sales net of cost of sales and commercialization costs. (3) Total Vaccines sales were $1,928 million and $2,008 million on a global basis for fourth quarter 2019 and 2018, respectively. (4) Total Diabetes sales were $1,472 million and $1,485 million on a global basis for fourth quarter 2019 and 2018, respectively. (5) Includes Pharmaceutical products not individually shown above. (6) Other Revenues are comprised primarily of Healthcare Services segment revenue, third-party manufacturing sales and miscellaneous corporate revenues, including revenue hedging activities.

MERCK & CO., INC.

FRANCHISE / KEY PRODUCT SALESFULL YEAR 2019

(AMOUNTS IN MILLIONS)(UNAUDITED)

Table 3b Global U.S. International Full Year 2019 Full Year 2018 % Change Full Year 2019 Full Year 2018 % Change Full Year 2019 Full Year 2018 % Change TOTAL SALES (1) $ 46,840 $ 42,294 11 $ 20,325 $ 18,212 12 $ 26,515 $ 24,083 10

PHARMACEUTICAL 41,751 37,689 11 18,759 16,608 13 22,992 21,081 9 Oncology

Keytruda 11,084 7,171 55 6,305 4,150 52 4,779 3,021 58 Alliance Revenue - Lynparza (2) 444 187 137 269 127 112 176 61 190 Alliance Revenue - Lenvima (2) 404 149 171 239 95 152 165 54 * Emend 388 522 -26 183 312 -41 205 210 -2

Vaccines (3) Gardasil / Gardasil 9 3,737 3,151 19 1,831 1,873 -2 1,905 1,279 49 ProQuad / M-M-R II / Varivax 2,275 1,798 27 1,683 1,430 18 592 368 61 Pneumovax 23 926 907 2 679 627 8 247 281 -12 RotaTeq 791 728 9 506 496 2 284 232 22 Vaqta 238 239 130 127 2 108 112 -4

Hospital Acute Care Bridion 1,131 917 23 533 386 38 598 531 13 Noxafil 662 742 -11 282 353 -20 380 389 -2 Primaxin 273 265 3 2 7 -72 271 258 5 Invanz 263 496 -47 30 253 -88 233 243 -4 Cubicin 257 367 -30 92 191 -52 165 176 -7 Cancidas 249 326 -24 6 12 -46 242 314 -23

Immunology Simponi 830 893 -7 830 893 -7 Remicade 411 582 -29 411 582 -29

Neuroscience Belsomra 306 260 18 92 96 -4 214 164 30

Virology Isentress / Isentress HD 975 1,140 -15 398 513 -22 576 627 -8 Zepatier 370 455 -19 118 8 * 252 447 -44

Cardiovascular Zetia 590 857 -31 14 45 -69 575 813 -29 Vytorin 285 497 -43 16 10 51 269 487 -45 Atozet 391 347 13 391 347 13 Adempas 419 329 27 419 329 27

Diabetes (4) Januvia 3,482 3,686 -6 1,724 1,969 -12 1,758 1,718 2 Janumet 2,041 2,228 -8 589 811 -27 1,452 1,417 2

Women's Health NuvaRing 879 902 -3 742 722 3 136 180 -24 Implanon / Nexplanon 787 703 12 568 495 15 219 208 5

Diversified Brands Singulair 698 708 -1 29 20 46 669 688 -3 Cozaar / Hyzaar 442 453 -3 24 23 5 418 431 -3 Nasonex 293 376 -22 9 23 -61 284 353 -19 Arcoxia 288 335 -14 288 335 -14 Follistim AQ 241 268 -10 103 115 -11 138 153 -10

Other Pharmaceutical (5) 4,901 4,705 4 1,563 1,319 18 3,343 3,380 -1 ANIMAL HEALTH 4,393 4,212 4 1,306 1,238 6 3,086 2,974 4 Livestock 2,784 2,630 6 582 528 10 2,201 2,102 5 Companion Animals 1,609 1,582 2 724 710 2 885 872 2

Other Revenues (6) 696 393 77 260 366 -29 437 28 *

* 200% or greater (1) Only select products are shown. (2) Alliance Revenue represents Merck’s share of profits, which are product sales net of cost of sales and commercialization costs. (3) Total Vaccines sales were $8,368 million and $7,262 million on a global basis for December YTD 2019 and 2018, respectively. (4) Total Diabetes sales were $5,714 million and $5,994 million on a global basis for December YTD 2019 and 2018, respectively. (5) Includes Pharmaceutical products not individually shown above. (6) Other Revenues are comprised primarily of Healthcare Services segment revenue, third-party manufacturing sales and miscellaneous corporate revenues, including revenue hedging activities.

MERCK & CO., INC.

PHARMACEUTICAL GEOGRAPHIC SALES (AMOUNTS IN MILLIONS)

(UNAUDITED)Table 3c

2019 2018 % Change % Change 1Q 2Q 3Q 4Q Full Year 1Q 2Q 3Q 4Q Full Year 4Q Full Year

TOTAL PHARMACEUTICAL $ 9,663 $ 10,460 $ 11,095 $ 10,533 $ 41,751 $ 8,919 $ 9,282 $ 9,658 $ 9,830 $ 37,689 7 11

United States 4,175 4,758 5,132 4,694 18,759 3,716 3,841 4,649 4,402 16,608 7 13 % Pharmaceutical Sales 43.2% 45.5% 46.3% 44.6% 44.9% 41.7% 41.4% 48.1% 44.8% 44.1%

Europe (1) 2,335 2,301 2,304 2,373 9,314 2,402 2,322 2,114 2,237 9,076 6 3 % Pharmaceutical Sales 24.2% 22.0% 20.8% 22.5% 22.3% 26.9% 25.0% 21.9% 22.8% 24.1%

Japan 779 900 894 921 3,494 718 834 740 835 3,127 10 12 % Pharmaceutical Sales 8.1% 8.6% 8.1% 8.7% 8.4% 8.1% 9.0% 7.7% 8.5% 8.3%

China 725 745 898 773 3,141 459 530 488 601 2,077 29 51 % Pharmaceutical Sales 7.5% 7.1% 8.1% 7.3% 7.5% 5.1% 5.7% 5.1% 6.1% 5.5%

Asia Pacific (other than Japan andChina) 642 606 638 614 2,500 653 694 566 598 2,512 3 0

% Pharmaceutical Sales 6.6% 5.8% 5.8% 5.8% 6.0% 7.3% 7.5% 5.9% 6.1% 6.7% Latin America 427 523 534 429 1,914 398 459 493 530 1,880 -19 2

% Pharmaceutical Sales 4.4% 5.0% 4.8% 4.1% 4.6% 4.5% 4.9% 5.1% 5.4% 5.0% Eastern Europe/Middle East Africa 343 388 423 423 1,577 335 356 347 349 1,388 21 14

% Pharmaceutical Sales 3.6% 3.7% 3.8% 4.0% 3.8% 3.8% 3.8% 3.6% 3.6% 3.7% Canada 177 179 211 216 783 196 192 177 211 776 2 1

% Pharmaceutical Sales 1.8% 1.7% 1.9% 2.0% 1.9% 2.2% 2.1% 1.8% 2.1% 2.1% Other 60 60 61 90 269 42 54 84 67 245 34 10

% Pharmaceutical Sales 0.6% 0.6% 0.5% 0.9% 0.6% 0.5% 0.6% 0.9% 0.7% 0.7% (1) Europe primarily represents all European Union countries and the European Union accession markets.

MERCK & CO., INC.OTHER (INCOME) EXPENSE, NET - GAAP

(AMOUNTS IN MILLIONS)(UNAUDITED)

Table 4 OTHER (INCOME) EXPENSE, NET

4Q19 4Q18 Full Year

2019 Full Year

2018 Interest income $ (50) $ (86) $ (274) $ (343)Interest expense 220 203 893 772 Exchange losses 21 25 187 145 (Income) loss from investments in equity securities, net (1) (119) 52 (170) (324)Net periodic defined benefit plan (credit) cost other than service cost (136) (128) (545) (512)Other, net (159) 44 48 (140)Total $ (223) $ 110 $ 139 $ (402) (1) Includes net realized and unrealized gains and losses from investments in equity securities either owned directly or through ownership interests in investmentfunds.

Exhibit 99.3

News Release FOR IMMEDIATE RELEASE Media Contacts: Pamela Eisele

(267) 305-3558 Patrick Ryan(908) 740-1038

Investor Contacts: Peter Dannenbaum(908) 740-1037 Michael DeCarbo(908) 740-1807

Merck to Focus on Key Growth Pillars Through Spinoff of Women’s Health, Trusted Legacy Brands and Biosimilars Products into New Company

(“NewCo”)

NewCo to be a Leading Women’s Health Company; Represents Total Revenue of Approximately $6.5 Billion for Merck in 2020 · Separation to enhance focus of both Merck and NewCo to better meet the needs of their patients and customers and achieve faster growth and greater value for

all stakeholders· Merck to benefit from strong growth across its current pillars of Oncology, Vaccines, Hospital and Animal Health, while aspiring to be the premier research-

intensive biopharmaceutical company· Transaction enables Merck to achieve in excess of $1.5 billion in operating efficiencies by 2024; targeting Non-GAAP operating margin greater than 40%· NewCo will pursue global leadership and sustainable growth in Women’s Health; will realize full potential of its trusted Legacy Brands and rapidly expanding

Biosimilars products· Merck to retain its dividend of $2.44 per share post separation and anticipates future increases with the goal of achieving a 47% to 50% payout ratio over time;

NewCo expected to pay an incremental dividend· Transaction intended to be completed in the first half of 2021 KENILWORTH, N.J., Feb. 5, 2020 – Merck (NYSE: MRK), known as MSD outside the United States and Canada, today announced its intention to spin-offproducts from its Women’s Health, trusted Legacy Brands, and Biosimilars businesses into a new, yet-to-be-named, independent, publicly traded company. Thespinoff will allow both management teams to drive increased responsiveness to the particular needs of their patients and customers and achieve faster growththrough focused and fit-for-purpose operating models.

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Merck will continue to benefit from strong growth across its current key pillars of Oncology, Vaccines, Hospital and Animal Health, while remaining

fully committed to investing in research and development in pursuit of breakthrough innovations across all areas of science and to driving value from its deep late-stage pipeline. As a premier research-intensive biopharmaceutical company, Merck will continue its pursuit to advance the prevention and treatment of diseasesthat threaten people and communities around the world.

“Over the past several years, we have purposefully shifted the focus of our efforts and resources to our best opportunities for growth,” said Kenneth C.

Frazier, chairman and chief executive officer, Merck. “This has led to the exceptional results we are reporting today. Given the opportunities now in front of us, webelieve we can benefit from even greater focus. At the same time, we believe additional resources and focus will help ensure that our expansive portfolio, includingmany trusted and medically important products, reach their full potential. We have therefore made the decision to separate into two growth companies: Merck andNewCo. By optimizing our human health portfolio, Merck can move closer to its aspiration of being the premier research-intensive biopharmaceutical company,while also properly prioritizing a set of products at NewCo that are important to public health and the patients who rely on them, and which present realopportunities for growth.” SPINOFF CREATES TWO INDEPENDENT GROWTH COMPANIES Compelling Strategic Rationale for Spinoff

Merck believes the spinoff will deliver significant benefits for both Merck and NewCo and create value for Merck shareholders. The transaction isexpected to create two companies with:

· Enhanced strategic and operational focus on key drivers to accelerate growth,· Improved agility to anticipate and respond to customer needs and rapidly evolving market dynamics,· Simplified operating models with reduced complexity and improved efficiencies,· Optimized capital structures and resource allocation to pursue their distinct strategic agendas for long-term success and deliver greater returns to shareholders,

and· Improved financial profiles making for unique and compelling investment cases.

- 3 -

Merck to Retain its Portfolio of Key Growth Drivers in Oncology, Vaccines, Hospital and Animal Health

Merck will retain its current growth pillars of Oncology, Vaccines, Hospital and Animal Health and continue to invest in research and development ofbreakthrough innovations across all areas of science. Led by highly innovative products, including KEYTRUDA (pembrolizumab), Lynparza (olaparib), Lenvima(lenvatinib mesylate), GARDASIL (Human Papillomavirus Vaccine, Recombinant), BRIDION (sugammadex), ZERBAXA (ceftolozane and tazobactam), andBRAVECTO (fluralaner), as well as its leading diabetes business and other key products, Merck will continue to benefit from broad commercial scale and remainscommitted to ensuring continued access to its innovative medicines across the globe.

The spinoff of NewCo will reduce Merck’s Human Health manufacturing footprint by approximately 25% and the number of Human Health products it

manufactures and markets by approximately 50%. This will allow for a more focused operating model in support of its growth products. As a result, Merck expectsto optimize its resources, grow faster and achieve meaningful operating margin expansion over time through increased productivity and efficiency.

NewCo to be Comprised of Products from Merck’s Women’s Health, Trusted and Medically Important Legacy Brands and Biosimilars Businesses

NewCo will pursue global leadership and focused, sustainable growth in Women’s Health led by the growing and patent-protected NEXPLANON(etonogestrel implant) franchise and fueled by its leading contraceptive and fertility businesses. NewCo expects to establish a leading position in Biosimilars alongwith its partner, Samsung Bioepis Co., Ltd., focusing on its current portfolio including RENFLEXIS (infliximab-abda) and BRENZYS (etanercept) in immunologyand ONTRUZANT (trastuzumab-dttb) in oncology, and is well-positioned to be a partner in the commercialization of biosimilars worldwide. NewCo will have alarge portfolio of highly profitable and trusted brands consisting of dermatology, pain, respiratory, select cardiovascular products including ZETIA (ezetimibe) andVYTORIN (ezetimibe/simvastatin), as well as the rest of Merck’s Diversified Brands, with strong cash flows that will support investments in future growthopportunities. In addition, NewCo will pursue opportunities to partner with biopharmaceutical innovators looking to commercialize their products by leveragingNewCo’s scale and presence in fast growing international markets.

NewCo will have a global footprint with approximately 75% of sales generated from ex-U.S. markets, significant scale and geographic reach, world-class

commercial capabilities, and approximately 10,000 to 11,000 employees. NewCo is expected to be headquartered in New Jersey.

- 4 -

FINANCIAL OUTLOOK Merck Targeting 40%+ Operating Margins by 2024; Believes Revenue Potential is Underappreciated; Retaining Current Dividend

Merck expects strong revenue growth each year through 2024, which will accelerate as a result of the spinoff. Merck continues to expect meaningful operating margin expansion over time. The spinoff of NewCo should enable Merck to achieve incremental

operating efficiencies in excess of $1.5 billion by 2024, while continuing to increase investment in key growth drivers and pipeline assets. Merck is thereforetargeting Non-GAAP operating margins greater than 40% in 2024, higher than what Merck expected to achieve pre-spinoff.

Merck expects to receive $8 billion to $9 billion through a special tax-free dividend from NewCo. Merck expects that these funds will be allocated to

business development or share repurchases and will provide more details about the planned usage of these funds closer to the spinoff date. Merck will retain its current 2020 dividend of $2.44 per share and anticipates future increases with the goal of achieving a 47% to 50% payout ratio over

time.

Combined Value Creation

Shareholders holding both Merck and NewCo post spinoff are expected to benefit from increased combined non-GAAP (generally accepted accountingprinciples) earnings per share assuming dilution (EPS) over time, as well as higher combined dividends. The combined non-GAAP EPS of the two companies isexpected to be nominally lower initially than what Merck would have achieved pre-spinoff, reflecting costs necessary to operate NewCo as an independentcompany. However, as a result of the incremental growth that NewCo is expected to achieve, combined with the benefit of ongoing operating efficiencies at Merckenabled by the spinoff, the company expects Merck and NewCo to realize higher combined non-GAAP EPS within 12 to 24 months post-spinoff.

- 5 -

NewCo Expects to Achieve Strong Profitability and Low-Single-Digit Revenue Growth from 2021 Base; Expects to Pay Incremental Dividend

The products to be spun off into NewCo are expected to generate 2020 revenue of approximately $6.5 billion within Merck, with a non-GAAP operatingmargin of approximately 45%. As an independent company from a 2021 base-year of approximately $6.0 billion to $6.5 billion in revenue, NewCo is expected toachieve low-single-digit revenue growth. Inclusive of costs necessary in standing up NewCo as an independent company, non-GAAP operating margins areexpected to be in the mid-30% range in the first year post separation and increase over time. NewCo’s earnings before interest, taxes, depreciation, andamortization (EBITDA) margins are expected to be in the low-to-mid 40% range in the first year post separation and increase over time.

NewCo is expected to have $8.5 billion to $9.5 billion in initial debt, with substantial cash flow that will provide ample financial flexibility for potential

business development, debt paydown and a meaningful dividend. This expected dividend will be entirely incremental to Merck’s dividend.

LEADERSHIP AND GOVERNANCE NewCo to be Led by Experienced Pharmaceutical Executives

Kevin Ali, who brings three decades of pharmaceutical commercial experience from within Merck, will be named chief executive officer of NewCo. Alihas led Merck’s enterprise portfolio strategy initiative, reporting to Frazier, for the past year. Prior to this, Ali served in many leadership roles within Merck,including president, MSD International; president, Emerging Markets; senior vice president in charge of the Bone, Respiratory, Immunology and Dermatologyfranchise; managing director of Germany and managing director of Turkey.

“Built on the foundation of a trusted, high-quality portfolio, NewCo will help people around the world live healthier lives, with a special focus on

investing in innovations for the distinct healthcare needs of women,” Ali said. “We are committed to becoming a leader in Women’s Health driven by organic andinorganic opportunities fueled by our portfolio of trusted legacy brands and our commitment to growing our rapidly expanding biosimilars business.”

Carrie Cox will be named NewCo’s Chairman of the Board of Directors. Cox has extensive experience in the pharmaceutical industry and deep expertise

in women’s health, formerly serving as chairman of Array BioPharma Inc., CEO and chairman of Humacyte Inc., president of Global Pharmaceuticals at Schering-Plough Corporation (acquired by Merck in 2009), executive vice president of Pharmacia Corporation and vice president of Women’s Health Care at Wyeth-AyerstLaboratories, Inc.

“I am delighted to be joining the leadership of NewCo and excited by the growth opportunities in its portfolio,” Cox said. “The time has come for a

company dedicated to serving the healthcare needs of women, in addition to a broad portfolio that continues to be important for the public health needs of patientsaround the world.”

- 6 -

More information about NewCo Board, governance structure and management team will be provided in the future.

Transaction Intended to be Completed in the First Half of 2021

The transaction is intended to take the form of a tax-free distribution to Merck shareholders of a new publicly traded stock in NewCo. The spinoff isexpected to be completed in the first half of 2021, subject to market and certain other conditions.

Conference Call

Merck will discuss this transaction on its previously scheduled earnings conference call today, Feb. 5, at 8:00 a.m. EST, which investors, journalists andthe general public may access via a live audio webcast on Merck’s website at https://investors.merck.com/events-and-presentations/default.aspx.. Institutionalinvestors and analysts can participate in the call by dialing (706) 758-9927 or (877) 381-5782 and using ID code number 8583879. Members of the media areinvited to listen to the call by dialing (706) 758-9928 or (800) 399-7917 and using ID code number 8583879. Journalists who wish to ask questions are requested tocontact a member of Merck’s Media Relations team at the conclusion of the call.

For further information, please visit https://merck.unleashinggrowthpotential.com.

About Merck For more than 125 years, Merck, known as MSD outside of the United States and Canada, has been inventing for life, bringing forward medicines and

vaccines for many of the world’s most challenging diseases in pursuit of our mission to save and improve lives. We demonstrate our commitment to patients andpopulation health by increasing access to health care through far-reaching policies, programs and partnerships. Today, Merck continues to be at the forefront ofresearch to prevent and treat diseases that threaten people and animals – including cancer, infectious diseases such as HIV and Ebola, and emerging animaldiseases – as we aspire to be the premier research-intensive biopharmaceutical company in the world. For more information, visit www.merck.com and connectwith us on Twitter, Facebook, Instagram, YouTube and LinkedIn.

- 7 -

Forward-Looking Statement of Merck & Co., Inc., Kenilworth, N.J., USA

This news release of Merck & Co., Inc., Kenilworth, N.J., USA (the “company”) includes “forward-looking statements” within the meaning of the safeharbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Examples of forward-looking statements include statements with respect to thecompany’s plans to spin-off certain of its businesses into an independent company, the timing and structure of such spin-off, the characteristics of the business tobe separated, the expected benefits of the spin-off to the company and the expected effect on the company’s dividends. These statements are based upon the currentbeliefs and expectations of the company’s management and are subject to significant risks and uncertainties. There can be no guarantees with respect to whetherthe proposed spin-off will be completed on the proposed timetable or at all. If underlying assumptions prove inaccurate or risks or uncertainties materialize, actualresults may differ materially from those set forth in the forward-looking statements.

Risks and uncertainties include but are not limited to, uncertainties as to the timing of the proposed spin-off; uncertainties as to the status of any required

regulatory approvals; the possibility that various conditions to the consummation of the spin-off may not be satisfied; the effects of disruption from the transactionscontemplated in connection with the spin-off; general industry conditions and competition; general economic factors, including interest rate and currency exchangerate fluctuations; the impact of pharmaceutical industry regulation and health care legislation in the United States and internationally; global trends toward healthcare cost containment; technological advances, new products and patents attained by competitors; challenges inherent in new product development, includingobtaining regulatory approval; the company’s ability to accurately predict future market conditions; manufacturing difficulties or delays; financial instability ofinternational economies and sovereign risk; dependence on the effectiveness of the company’s patents and other protections for innovative products; and theexposure to litigation, including patent litigation, and/or regulatory actions.

The company undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future events or

otherwise. Additional factors that could cause results to differ materially from those described in the forward-looking statements can be found in the company’s2018 Annual Report on Form 10-K and the company’s other filings with the Securities and Exchange Commission (SEC) available at the SEC’s Internet site(www.sec.gov).

###

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